Title: [88WashLRev245]Controlling the Prosecution of Bribery: Applying Corporate Law Principles to Define a “Foreign Official” in the Foreign Corrupt Practices Act
Abstract: Abstract:This Comment focuses on debate surrounding definition of an instrumentality within Foreign Corrupt Practice Act's (FCPA) official provision. The FCPA prohibits bribery of but provides little guidance as to types of entities included within meaning of an instrumentality. The Department of Justice construes this term broadly and therefore can aggressively prosecute alleged corruption. This Comment argues that courts should provide guidance on definition of a official within meaning of FCPA by applying principles of control drawn from corporate law. Such guidance would accomplish three important tasks. First, it would help corporations comply with FCPA. Second, it would align with approach used by foreign jurisdictions designated in treaty obligations. Finally, it could help achieve Congress's original objectives in enacting legislation: namely, to prevent corruption of foreign public officials as well as negative consequences for foreign policy.INTRODUCTIONIn wake of Watergate scandal, federal investigations uncovered illicit practices in both government and private business, including unreported campaign contributions and questionable and illegal1 payments to domestic and foreign political officials.2 The Securities Exchange Commission (SEC) began investigating these payments and discovered that approximately 400 U.S. corporations had made over $300 million in bribes to foreign public officials in order to secure business.3 In 1977, Congress responded by enacting Foreign Corrupt Practices Act (FCPA)4 to criminalize bribery and improve U.S. corporate image abroad.5 Congress noted severe foreign policy problems these bribes created for U.S., and intended for FCPA to prevent U.S. businesses from engaging in bribery, as this would have negative implications for image of United States abroad.6 Congress sought to restore public confidence in American corporate practice.7 The primary evil that Congress sought to address with FCPA was improper payments to foreign government officials, which invariably tend[] to embarrass friendly governments, lower esteem for United States among citizens of foreign nations, and lend credence to suspicions sown by foreign opponents of United States that American enterprises exert a corrupting influence on political processes of their nations.8The FCPA had a slow start.9 During first quarter century of FCPA's existence, SEC and Department of Justice (DOT), jointly responsible for enforcing FCPA,10 initiated only two or three cases per year. Fines tended to remain below $1, 000,000. 12 However, after an initial twenty years of relative dormancy, enforcement surged.13 Over ten years, DOJ and SEC have greatly increased number of enforcement actions and severity of fines assessed.14 In 2010, for example, DOJ and SEC initiated a record of forty-eight and twenty-six cases respectively.15 This trend shows no sign of abating, and DOJ recently confirmed its intent to vigorously enforce FCPA.16 In November 2009, Assistant Attorney General Lanny Breuer remarked that past year was probably most dynamic single year in more than 30 years since FCPA was enacted and promised to continue the upward trend in FCPA enforcement.17While DOJ officials commend surge in investigations and prosecutions, reaction in corporate world has been less enthusiastic. Of particular concern to directors and officers of corporations doing business abroad is rise of prosecution of individuals.18 According to Mark Mendelsohn, Deputy Chief of Fraud Division at DOJ, rise in individual prosecutions is not an accident.19 Rather, trend reflects Department's policy of deterring bribery by holding individuals personally accountable.20 The sanctions resulting from these enforcement actions have also risen dramatically. …
Publication Year: 2013
Publication Date: 2013-03-01
Language: en
Type: article
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Cited By Count: 1
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